tv First Up With Angie Lau Bloomberg October 13, 2015 7:00pm-8:01pm EDT
angie: a warning for wall street, jpmorgan says that market conditions and rates are ramping up pressure. the chips are down for intel, the world's largest chipmaker sees a tough corner ahead as companies scale back the demand for data centers. using a head, singapore is poised to act entering a technical recession. good day to you, i'm angie lau him a welcome to "first up here cap -- up."
here in asia, south korea, the unemployment rate for september came in at 3.5%. the economist we surveyed were expecting the rate tuesday at 3.6%. we will see how markets react. jpmorgan has a warning for wall street. the first of the big banks to reporort results since a volatie markets and low interest rate are putting pressure on the financial sector. su keenan joins us live. su keenan: we are seeing the stock trade about a dollar lower. the story here is that cost cutting failed to offset decline. revenue fell 6.4%. that was driven by a slump in trading and mortgage banking. mid-income rose.
the adjusted epm miss the estimate -- missed the estimate. was 23.5 billion and the third quarter, it was down from 21 5.1 when your 5.1 when your earlier. the markets in continuation of those low interest rates are eroding profit. we saw jamie dimon release a statement saying, we are seeing the impact of a challenging global environment. wall street hedge fund titan, leon cooperman says they might be seeing the impact unless diversification. >> they were mistakes. i spent 25 years of goldman sachs. the firm was a profitable. we had many diversified profit centers. by forcing them out of business, it is to weaken the enterprise.
by stronger they can be being more diversified. they should have risk-based capital. maybe require more capital. su keenan: trading activity suggests a lot of investors might be bracing for the worst. jpmorgan is the first of the letters report as the sectors comes that with numbers. at its highest level since march, etf. analysts also say the s&p 500 earnings likely dropped over 7%. casting a shadow a concern for other lenders? what are we expecting from other lenders? su keenan: we'll know soon enough. jpmorgan is already setting the town. we are expecting to see similar results.
bank of america, wells fargo, all reporting on wednesday. citigroup is expected on thursday. it has been a top trading environment. did others managed to cut cost and asked -- offset? or was it too big? angie: thank you. intel says demand for data center chips from amazon, google, and others is likely to slow. the world's biggest chipmaker is forecasting a revenue of 14 point $8 billion this quarter, plus or minus half a billion. let's bring in even king. -- eaten. what is the company say about chip business? reporter: i gave a nuanced answer. ceo was asked if it was a turning point for the pc market. there have been some short-term signals that have made it look that way.
he was careful to say, probably not. if things will get better, if new chips will be vessel, if windows will take off, it will take -- be a slow process. it will take over the next year or so. angie: tell us more about these server chips? before the conference call, the stock was largely flat. people were happy with the forecast. but was set on the call made people more concerned. this is regarding what corporations are doing, not so much the data centers. google and amazon are ok, they are still ordering. it is really the companies who are not building out their own data centers there's just themselves. -- themselves. they pointed to china. that put a limit on what has been a successful business for them. angie: what does become any say
about its long-term for -- growth prospect? people started at the executive if it was trouble. he said, no. they are largely confident that i kind of explosion in data center use that we have seen it going to continue. we get a bit of a return to gdp growth. enterprises will start ordering again. long-term, positive, short-term, a little bit of caution. angie: i think that is generally speaking what we are feeling as well. thank you. checking other headlines. west bank has gone into a trading halt ahead of plans to raise $2.5 billion of capital. all australia's major banks have
been seeking more cash to meet new regulations on surviving future shocks. announced cash earnings of more than $5.6 billion. be fullypo is said to subscribed after the first two days of book building. they told bloomberg that all -- orders posted by the government exceed shares on the offer. that means they could raise nearly $10 million. if a price on a high-end, the value could jump to $12 billion. that could be japan's biggest private station in 28 years. and creating worlds largest your company, they met need to let go of the world best selling beer. analysts say i that they might need to seller stake in china's slow beer -- no beer. give them control
over 40% of china's beer market. that could be considered a monopoly in china. it is worth over $3 billion. let's check on markets in asia. let's go to australia where the chinese imports are falling. really weighing down on trading partner, australia and new zealand. australia now a third of 1% down. let's head to new zealand. this is what it looks like. it is climbing, 4/10 of 1% higher. new zealand dollars spot is strengthening, but the governor saying there is likely going to be a rate cut in the horizon. we have seen the kiwi dollar weaken on the heels of that comment. let's head to japan.
in less than an hour, a start trading. nikkei to toy five close more than 1% down. check out futures in chicago, looking tepid. more than that, futures predicting a slower open at the start. dollar yen right now is weakening, it has been straight beenng on the heels of -- strengthening on the heels of the chinese import data. that triggered concern about a slowdown. two markets closed, no trading in malaysia or indonesia. over to singapore now, it could be the first developed country to enter recession following the global recovery. that is what economists are predicting. we have shery ahn following the story. how bad are the growth numbers? shery ahn: singapore's economy has worsened already in the
second quarter. we saw the economy contracts for percent -- contract 4%. this time around, the economy is expected to contract again by 1/10 of a percent. be ae are expecting it to technical recession. lb be first in the developed world. singapore is export dependent. they are heard by a slowing growth in china, not to mention uneven recovery in the u.s. and europe. 10 figurethis we have -- can 10 consecutive months of a decline in consumer spending. angie: where are we expect the action? we arehn: given what seeing, 16 out of 25 economists now expects the central bank to ease policies. this would follow a surprise
move in january when they said they would seek to slow the pace of the local dollar gains against its trading partners. the monetary authority of singapore, the central bank, manages the economy through guiding the currency, instead of setting interest rates. they adjusted the pace of appreciation or depreciation by changing the slope, width, and center of the band. they refrain from disclosing the details of that. now we are expecting them to boost stimulus by allowing the currency to weaken. forecastersat what -- economists are forecasting for the monetary authority to do. 10 of them think they will reduce the slope that would slow the pace of the currency appreciation against the basket over time. bankthink that the central will lower the center of the
band that would allow the singapore dollar to weaken. expectect the -- four the monetary authority to widen the band. right now the consensus is that the singapore dollar will weaken throughout the year. analysts are expecting an approximate a percent depreciation for the currency for the rest of the year. that would be the worst performer in asia sent the asian financial crisis. angie: two straight quarters of contractions. we will watch that. thank you. coming up next, managing the slowdown in china, the strategy at work with russell investments, when we return after this short break. stay with us. ♪
the play was brought down by a russian-made missile fired from the eastern ukraine. dutch investigators do not say whether it was launched by pro-moscow separatists or ukrainian forces fighting in the area at the time. the report also criticized kiev for not closing the airspace over what was a war zone. all 298 people on the plane were killed. military leader is to demand compensation from former premier for her controversial rice subsidy program. the prime minister says he is acting now because of the statute of limitations expiring soon. he won -- she won power in 2011, partly in part for her subsidy plan. they say it was riddled with corruption and wasted billions of dollars. has nonstoprlines
service to new york. of 15,300r journey kilometers will surpass a planned flight from dubai to panama city. they say they will use in ultralong range version of the airbus for the trip from 2018. currently the world's longest flight is from sydney to dallas. twitter shares, check it out. up 1% after ceo jack dorsey says ,t will cut more than 300 jobs or around a percent of the workforce as a part of a restructuring effort. johnson & johnson fell half a percent after beating estimates in the last quarter. they also said they would buy back to billion dollars worth of shares. writer r --yder was the top loser, due to higher-than-expected out of
service vehicles. rising following after in nine of the top 10 sessions, closing down two thirds of the percent. my next guest says the u.s. economy is strong enough to shrug off downside global risk. steve would is a strategist at russell investments. thank you, steve. you say that even the china reported that imports fell for 11 straight month. you still think that the u.s. is on course? steve: recovery in the united states has been spectacular. it has been in that 2.5% growth. the chinese economy has been decelerating with intention for some time now. it is certainly not a new story.
somewhat stale news for investors. is economy right now globally focused, but not as much as singapore. these are countries that will be far more exposed to global markets. the global deceleration does not but we are not so pessimistic. angie: i guess china is waiting in terms of focus, the number one thing would be the fed. what do you think? stephen: 2015 -- we thought the fed would move in september, but september, october, december, those are pretty much the same meeting for long-term investors. we think of the fed is looking to normalize and send the signal to the market that at least they think we are in a normal situation. one year ago, quantitative easing was put to bed.
i think the federal reserve would like to have a positive fed funds rate. going into next year, they would have at command there. so, the fed funds rate, qe would be put to bed. the tenure long story that the market has been asking, how will the market react when they said finally begins to raise rates. we are getting the answer. seen in the last few weeks is due to anticipating the fed move. thee: as you anticipate market reaction, how are you setting yourself up for marketplace -- market plays. stephen: we are looking it actively managed global portfolios. what that means for the u.s. investor is to look at the home country buys they might have in the u.s.. i would look at every home country bias. europe is beginning quantitative
and the unsafe is ending. -- the united states is ending it. u.s., but wee think that the evaluation and equity space does look challenging. we are looking in asia as a second behind europe. japanese equities would be second. we are looking at actively managed. there is going to be some granularity as correlations move down. angie: if you are chasing qe around the clothes -- globe, what are you staying away from? stephen: i think qe is chasing the world. the fed in the u.s. started qe, the europeans will copy that word for word.
as are the japanese. i think right now, it becomes quality. you want to look into security selections. where valuations are not oppressive. that is probably the first place you want to look. we do not see inflation as being a high probability threatening her term -- threat in the near term. growth between value and -- we think it is more of a quality, security environment. you also look at global fixed income. look at what our risk streaking -- seeking strategies. angie: thank you so much. coming up next, not just the lost boys, simply a loss.
million. had a marketing budget of around $100 million. it managed to pull in just $15 million at the north american box office. one.is a rough let's bring in bloomberg news entertainment reporter, chris paul mari who joins us live from l.a.. why has this movie done so badly? it's you jackson -- hugh jackman? chris: the critics did not like it. it was hard to tell it is a kid film or an adult film. it was a pre-quilted peter pan, it did not have tinkerbell. it did not resonate with the moviegoers. angie: how is -- how unusual is this? chris: it is probably more common than we know.
the movie studios do not really reveal how much they lose on these films. was a $150 billion budget, another 100 million to market it , we do not know exactly how much they lose often, this time we were able to hear something. just tallying of the rough figures, $250 million investment, and marketing, they only make $15 million, where does this leave them going forward as they try to get more audience in theaters? chris: warner brothers is definitely off of its game this year. they have three franchises to build on, d.c. comics, they have that man is superman coming out next year, they have the lego movie franchise, they also have harry potter. they will have their day again. angie: chris, thank you. out live from l.a..
japan is in the grip of rugby fever after the success of its team at the world cup. blossoms 13 matches in england, including a defeat of south africa. they could not reach the knockout stages. the style has given the game a huge boost. the team flew home to a hero's welcome. they hope to do better next time around. coming up next, letting go of china's snow. how the creation of the world's biggest brewer thomas may meet -- mean the loss of the planet's best selling beer. ♪
with: intel beats ministry invested earnings, it is the -- is it enough to keep investors happy? emily: i'm emily chang, this is "bloomberg west." coming up, twitter announces plans to cut 300 jobs. two twitter suspends the accounts of leading sports sites as the nfl complaint about copyright violations. i will talk to the cofounder of
post mates about the battle for market share. intel's better-than-expected earnings, they reported $3.1 billion in net income for the third quarter. they showed strong demand for a data center chips. but not all good news, they are feeling the decline of the pcs. joining me now to take a deeper look at the earnings are editor at large cory johnson and alice. cory, you have been looking at the number of intel shares, what is there a big take away? cory: it could've been worse. wall street was looking for the guidance to come down, it did not. you is very interesting, can see everything we talk about on the show. all of the big changes in the world of technology, all taking place within these results.
it is the shrinkage of traditional business and enterprise, pcs, desktops, notebooks. and the growth in the data center and how that can yet -- connects with mobile. alex, what are you most optimistic about? alex: actually, we are not optimistic over intel. we did get off of our sell rating because we did suspect there was going to be better news. this is what this report was about, at least the hemorrhaging has stopped to a degree. data centers are still a good growth area, although they did miss the expectations. if you go into the results a little bit, the reason i think there is some concern worth cut, conventional wisdom when they're raising a because they are optimistic about the future. the data center is missing or guidance for growth. still has not
convinced us that it has a meaningful strategy to grow over time. emily: you wonder what happens in companies start to choose external cloud providers. i will get to a quote about data centers and a second. i think the data center business is there hope. they miss mobile in a lot of ways. the pc business -- they have been lucky to get pricing in that business. they are really putting a lot on this data center business getting better. let's -- listen to what stacy smith had to say. saw solidh: we quarter -- we beat our expectations. iserneath that what we saw continued strong growth in the data center, memory business, and the internet of things business that offset some of the weakness of the pc segment.
pc segment came in a little better than we thought. we are seeing units down this year, but the quarter was a little better than we thought. smith.intel ceo, stacy they beat their own expectations. alex: they did not make what they set the expectations for, which is 15% growth. better than the 10% growth is slow to last quarter, sure, but not a very encouraging number. that really underpins the hope in the stock. what cory pointed out about data center kind of driving expectation. data center is the other side of the pc court. one of the reasons they are weak is because computing has just it to be cloud. people do not need pcs the same way. cory: they say they do not miss mobile, because every phone connect to a data center. alex: at the end of the day, computing is growing, intel is not.
basically are offsetting pc losses with decent growth in data center. when the data center misses, that sets off the alarm bells for investors. emily: what is the future look for -- look like for intel, in the future where dell is together and pc -- dell and pc are together. cory: it is a big deal because it is a bet on the old world of -- every company would have to set up their own data center. they would have to have their own storage. they would have to have their own computing systems. the new model is very different. intel stands to benefit from both. the new model is all about the cloud. it is all about amazon. you can look at that met -- merger as anti-amazon. intel is in a position to benefit from both. and legal our guest yesterday
said he was not optimistic about the prospect of dell anc taking share from eight of u.s.. alex: nor would we be. the good news for intel is dell is a friend to intel. to the extent that they have some success and better scale through this, that should be a net positive. right now, the positive for intel is that as the cloud build out to support all of these fortune 500s shifting to the cloud, investors have to asked -- themselves, what happensask two years down the road with a don't need to spend more. cory: imagine this massive amounts of debt for dell, and the face of these weak pc numbers coming out of intel, helped by price. who is, in their right mind thinking, i want to underwrite this new dell offering. the legal corey, you said a
lot of time with intel executives, how optimistic are you, about his leadership and what he has done so far. cory: that is a great question. i am impressed with the management team at intel. i think they recognize their future -- the writing is in their face. they have seen it for a while. the growth of their other businesses, their internet of , part of that is re-qualifying businesses. it is a meaningful business. recognize they have to see the world many years out. alex: i think it is important to point out the problems they are seeing right now are inherited. they are putting new initiatives
in place to try to offset that. whether they will be successful or not remains to be determined. i think the honey more dust honeymoon defending. where the rubber hits the road is, can they get pcs to stop sliding. can they keep the arm based system to keep from encroaching. will the strategy work? all of tricky thing when the exciting activity is happening outside of intel. emily: we are waiting for some new chips this fall. thank you so much. now as a democratic candidate as thesident -- democratic candidates go head-to-head, rand paul is hoping a live stream will bring his presidential campaign back from the dead. the kentucky senator has been live streaming his entire day on facebook and new stream. recent polls show paul trailing badly. this is his first time he has tried to give his campaign buzz
with stones he hopes will go viral. last month he shot a copy of the u.s. tax code with an assault rifle. in july he took to it with a wood chipper and chainsaw. coming up, twitter is cutting as much as a percent of their work force. the real shocker and how many employees found out they lost their jobs, next. twitter temporarily suspend the accounts of two top sports sites. ♪
emily: i want to tell you about a developing story, according to people familiar with the matter, the chipmar has hired a bank and already received interest sandisk of its rivals, is in talks. any deal would add to what has been the biggest year ever for the semi conductor in na. to twitter and jack dorsey's first big move since being named permanent ceo. they plan to eliminate as many as 336 editions, or 8% of its global workforce. in a companywide e-mail to employees, he says the move is aimed at getting products out the door more quickly. this morning he also tweeted, made -- made some tough but necessary decisions that enables twitter able to refocus and growth.
employees took to twitter to share the news, the bigger surprise is how they received it. impacted bye been twitter layouts, this is how i found out this morning. one engineer posted this. , alex barinka, sarah, i want to start with you. the engineer wanted to follow up by saying he got a call personally, but found out through his e-mail first. he did not get to that message in time. what are you hearing from some of these people? sara: there are several people who said that is how they heard. to be fair, it is hard when you have employees working from home. you have to hope they pick up their phone. you have to tell them somehow so you do not find out from a password reset. emily: one of the problems we
have been talking about is twitter and some of the reporting that sarah has done is that a lot of people at twitter seem to have overlapping responsibilities. people came up through different regimes, some of them are working on the same things come slowing things down, what are you hearing about? reporter: sarah had a great story about the need for more urgency when it comes to redeveloping some of twitter's projects and getting out there quicker. we have seen moments come out recently. can is the thing where you see relevant news, built for people who are not these power users. it has taken time. it has not been intel dorsey came back that we saw some of these shifts. some of this overlap potential, bureaucracy deciding things by committee. these are things that get away from the start of roots. they can gum up the system and slow down the company. tolie girl the goal here is
ship products more quickly, he talked about the vine and periscope. what will you be watching for? have we heard about any other overhauls? a clue ofnts give us what happens next. the ultimate goal is to get twitter to the mainstream. i think we will see periscope and vine integrated into mom -- moments. of nfl. will see vines that bring in this mixed form of entertainment on twitter that lets people know what is going on. was enjoying moments over the weekend with the blue angels performing here in san francisco. they had video from inside the cockpit. pilots were tweeting. it was easier to see than usual. ipo reporter,the your ear is to the ground, what
are you hearing from your sources about now that jack dorsey is in the role, doing two jobs, anything new? think it has been telling, square is trying to get themselves in order. they did file confidentiality -- confidentially. when you look at what dorsey is doing right now, it is obvious twitter has been more of a problem child, given the conversation we're having. if i were an investor, you have to think, does he have his management team below hemet square who can support the business throughout the roadshow process. those are the questions that will come out. emily, you will be the first to know. emily: thank you. jack dorsey, obviously trying to build and rebuild his team. sarah frier, and alex brink of
bloomberg news, thank you. speaking of twitter, the nfl temporarily sacked the twitter account of two leading sports site. they suspended sb nation and debts been after football conferences complained about copyright infringement. beens websites have embedding highlights and other sports clips on their accounts for years. both professionally and amateur leagues have started pushing back for its part, the nfl says they did not request any specific accounts be offended. really does have a content production deal with twitter. both of those accounts are now back. find twopost mates more big retailers. the ceo joins us to tell us he is not worried about competition. ♪
emily: i'm emily chang, and this is "bloomberg west." a publisher announced today that readers of germany's most popular online news site, build, must either turn on their ad turners or pay a fee -- off their ad liquors -- ad blockers, or pay a fee. according to the company, ad blocking is currently a serious the limit for digital publishers.
i asked the aol ceo about the controversial issue. >> i think there is a big problem here. arefact that consumers blocking ads is a signal to us that we have to include add content. that is one of the things we are doing is talking about how to we improve that experience. everyone will do that. emily: ad blocking cost publishers an estimate of $22 billion this year, according to page for. -- fair. one of the biggest disruptors paving the way and the sharing economy, post mates has been on a tear lately adding partnerships such as aaa, walgreens, and now at the. -- now etsy. --dition is fierce competition is fierce. now amazon is joining. you made a number of announcements today.
which of these will be the most transformative to the postmates business? guest: we are excited about our api. an api that local merchants can integrate into their businesses. verynk that brings us close to our vision of helping local merchants and feet with big-box retailers. -- gal how does that work emily: how does that work? guest: you can implement api into your website. that facilitates the entire transaction, and hopefully sends someone the goods you are selling within a few minutes. emily: i mentioned it earlier, but you have so many different companies impeding in on-demand delivery, what gives you the edge? guest: there is competition.
there are big and small players. i think we have a dedicated team. i think we also have the popular vote. we have been doing this for four plus years. emily: amazon doesn't have the popular vote? maybe in awareness, but we are being -- trying to be there for the local merchants. we are trying to be different from amazon. emily: how? guest: we like global merchants to succeed. we do not want to build warehouses where it is easy to shift from, we want to take the city and use it as a warehouse. emily: i was recently speaking with bill earlier, he is very skeptical about the economics of businesses like yours. take a listen. bill: the more we get into this territory, the more optimistic we get about as models that are lower margin. that like the last time
all of this stuff happened was 1999. cosmo, it is the same -- this is -- the smartphone helps. emily: respond. guest: i think bill is right to a large extent. if companies are overvalued for the value they are bringing, we will have a problem. postmates ishings, valued at like uber. emily: wider the unit economics why do the unit economics work? profitwe have had a margin that is positive for 3.5 years. maybe it is my german background , but the first order of business is to figure out if you
have a path to profitability. inly: you can be profitable 2015? guest: by continuing the way we did in the past. we look at the unit economics, make sure you have a great mix of products and offerings from all sides. emily girl can you give me numbers -- emily: can you give me numbers? guest: maybe a little higher, maybe lower, it depends. customer, i want you to succeed, i want my life to be easier, you make it easier. there have been a few times were something has been missing. it happened again last week. it was too much trouble to call and tell them -- it was the entree. how you handle that? guest: the company is growing fast. taking care of the quality is my biggest worry.
we have to make sure that we can grow in a way that the quality remains at a very high standard. thankfully, most customers have great experiences. we know that we have customers that have subpar experiences. we also know that -- what we need to do. part of the appeal is you can order from almost any place. that leads to a slightly higher error rate. that translates orders better, that makes our fleet stronger, those are things that we are working on. emily: if it goes right, what does postmates become? guest: the greatest tool for local merchants. it becomes a beautiful app for you. it allows you to purchase things from your city that you can have in a few minutes. .mily:, the ceo of post mates
mark: i'm mark halperin. john: and i'm john heilemann. and "with all due respect" to the democratic candidates deting here tonight, you can run, but you can't hide. ♪ john: it's vegas, baby, vegas. good evening from the first democratic presidential debate. we are at the wynn hotel here in sin city. although you could call it spin city. this room is one of the main reasons. the press flies out around the country. it's the spin room, the spinderdome. we will be your spin buddies for